A soft drink bottler incurred the following plant utility costs: 1,800 units bottled with utility costs of $5,750, and 1,500 units bottled with utility costs of $5,200. What is the variable cost per unit bottled (Use the High-low method. Round to the nearest cent.)

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Quizplus · Accepted Answer

The variable cost per unit is calculated using the high-low method: (Cost at high activity - Cost at low activity) / (High activity units - Low activity units) = ($5,750 - $5,200) / (1,800 - 1,500) = $550 / 300 = $1.83 per unit.

A Soft Drink Bottler Incurred the Following Plant Utility Costs